Entrepreneurship
-is the process of designing, launching and
running a new business, which is often initially
a small business.
Economist Joseph Schumpeter (1883–1950)
"creative destruction"
For Schumpeter, the changes and
"dynamic disequilibrium brought on by the
innovating entrepreneur the norm of a
healthy economy
Societal and Economic Benefits of
Entrepreneurship
1. Entrepreneurship produces more jobs that
equate to an increase in national income
-Millions of unemployed people will have the
opportunities to have a decent occupation. Small
businesses produce jobs and create wealth
2. Entrepreneurship amplifies economic
activities of different sectors of society
-A simple eatery in a rural area and a coffee
shop in an urban area both ignite economic
activity regardless of their business scale.
3. Entrepreneurship introduces new and
innovative products and services.
-Entrepreneurs to seek opportunities and
improve a product or service
4. Entrepreneurship improves people’s living
standards.
5. . Entrepreneurship disperses the economic
power and creates equality.
-It balances the economy by distributing national
income to more businesses rather than to only
few monopolies.
6. Entrepreneurship controls the local wealth
and balances regional development.
-It makes sure local resources are utilize well
and that every area has an appropriate allocation
of resources.
7. Entrepreneurship reduces social conflicts
and political unrest.
-Imagine if there are no or only few sari-sari or
supermarket stores in your area. All of you will
then fight for the food supplies because the store
cannot supply all you will then fight for the food
supplies because the store cannot supply all your
needs.
8. Entrepreneurship elicits economic
independence and capital formation.
-A country with more entrepreneurs is highly
likely to become financially independent and
will less likely need the help of other countries.
This also applies to families, barangays, and
cities. Entrepreneurship creates wealth instead of
barrowing
Famous Entrepreneurs
Microsoft- Bill Gates
FaceBook-Mark Zuckerberg
5 Levels of Intensity of
being an Entrepreneur
Self Employed
-These are persons, not comfortable with the
routines of a desk.
Manager
-Entrepreneurs feel the need to step up and ask
some help from the people around them. They
delegate and hire potential employees to do the
work
Leader
-Entrepreneurs in this level already enjoy seeing
their people flourish, stepping up and producing
great results with minimal supervision.
Investor
-Look for more opportunities for their business
to grow. They may either purchase one or two
businesses that can potentially add value to the
company, or sell their established businesses (as
a franchise) to potential entrepreneurs.
True Entrepreneurs
-They aim for quality and excellence in their
work. They have fully learned and continue to
practice, a four-step process of thinking.
Four Step Process of Thinking
Idealization- Entrepreneurs dream enormously
and desire to build an ideal environment.
 Profit
Visualization- Entrepreneurs start to create Entrepreneurs:
plans to make the dream a reality. Opportunity income is unlimited, It depends on
the success of the business
Verbalization- involves sharing their ideas with
other people knowing that their vision is already Employee:
occurring. Fixed per month and increases every year
depending on the performance of the employee.
Materialization- happens when the vision
becomes a reality. 2. Hiring and Firing, Organizational Setup,
major Key Result Areas
New terms to suit an
an entrepreneur’s field of expertise Entrepreneur:
-Serving the customer
Technopreneur- puts technology at the core of -Has the power to disengage nonperforming
his or her business model. employees

Social Entrepreneur- the one who takes Employee:

advantage of the country’s social problems and -Satisfying only the employer and direct
turn them to profitable institutions with the supervisor
intention of helping the disadvantaged -Fully dependent on the employer’s performance
community rather than making a profit.
3. Daily Tasks
Intrapreneur- an entrepreneur in a large Entrepreneur:
company or corporation who is tasked to think, -Performs necessary variable tasks to establish
establish, and run a new big idea or project. and manage the business.
They are usually the product managers or the -Prepares policies, procedures, and memoranda
business development managers in a company. in the business.

Extrapreneur- is an entrepreneur who hops Employee:

from one company to another to act as the -Has routine tasks and works on regular or
innovation champion, providing creative and normal hours
effective solutions. -Follows policies, procedures, and memoranda
in the from the employer
Common traits that entrepreneurs should
always have: 4. Leisure Time and Vacations
1. Proactive Entrepreneur:
2. Agents of change -Has a flexible schedule
3. Risk takers Employee:
4. Have a sharp eye for opportunities -Has a limited vacation days limited by
5. Sociable employer
6. Networkers
7. Decisive 5. Taxation
8. Balanced Innovative Entrepreneur:
-Taxed on the net income
1. Leader Employee
2. Communicator -Taxed on gross income
3. Problem solver
6. Comfort Level at work
Pros and cons of Entrepreneurship vs. Entrepreneur:
Employment
-Is comfortable in doing multiple and
challenging tasks and takes accountability with
the risks and profits of the business
Employee:
-May be comfortable with routines and minimal
risks.
COMMON SMALL BUSINESS IN THE
PHILIPPINES
Sari-sari store- it is one of the easiest
businesses to set up due to the minimal capital
required.
Rice Retailing- it is because Rice is the staple
food of Filipinos and other Asian countries.
Food Cart business
-the ones who are selling on the street
Printing business- this is lucrative in the
Philippines because the demand is very high.
Street food businesses- same with food cart
business, it is also widespread in the Philippines
Flea market Business or Tiangge-
entrepreneurs set up a small space and sell any
type of goods in a palengke set up that is
normally in an open space.
Spa, gym and nail care- this business offers a
range of massage treatments that can relax the
stressed areas.
Video and Photography business- this business
requires talents in capturing precious moments
of the celebrators in any important events. This
business is gaining popularity because of social
media.
Tutorial business- in the Philippines, has
become an important aid in reinforcing and
enriching the students basic education
knowledge.
Baking business- bread is the second staple
food in the Philippines.
Pan de sal is the most common bread being
offered by this business.
Web site development and design/ blogging-
the web site developer conceptualizes and
implements a Web site for another business.
Direct selling business- it is a face-to-face
selling of products by a sales agent.
Car wash and car care- business- you see often
this business in the large cities because of the
proliferation of cars.
Bar, Café, and Restaurant- the number of
foodies (food enthusiasts) has increased because
the Filipino palate became globalized.
Water station and LPG station- these
businesses can never go wrong as they
continously serve households.
Intrapreneurship- managing a start- up
businesses in established
Acquisition- buying another similar business or
a new business.
Franchising- is a business arrangement
Franchisor- the owner of the business acquires
distribution centres through the franchisees or
the affiliated dealers.
Recognizing The Potential Market
Opportunity Spotting And Assessment
-Beginning and considered as most difficult
-Entrepreneurs take note of interesting trends in
the environment
-Consumers are reliable sources of opportunity
information
Other major sources of opportunity
-Problems in the environment
-Problems encountered by co-entrepreneurs
-new trends
-The entrepreneurs toughest job is to carefully
assess the opportunity through estimation of
opportunity length, capitalization, threats,
profitability.
-Entrepreneurs should already think in advance
how they will position the product service in the
market.
Developing A Business Plan
-Entrepreneurs should formulate a business plan
when they have already spotted assessed the
opportunities for the market.
-A BUSINESS PLAN is a comprehensive paper
that details the marketing, operational, human
source, financial, strategic direction, and
tactics of the business.
Determining The Capital Needed
-It is mandatory in the entrepreneurial process to
calculate the resources needed to establish the
business.
-Careful calculation must be applied in
computing the complete set of sources needed
and include only those items that are considered
as the real needs in venture creation.
Running The Business
-This is the part where the entrepreneur should
use the resources allocated for the new venture.
-All aspects of the business plan should be
critically observed from operations, marketing
and sales, human resources, finance and the
strategy implementation.
-The entrepreneur should have a control and
monitoring system
Scanning the marketing environment is the
starting point of any new venture that involves
understanding and knowing the complexity of
the environment.
-Through scanning the environment an
entrepreneur can recognize various opportunities
and understand thoroughly the arena where the
future business will operate
Seeking, Screening, Seizing
-The 3s of opportunity spotting and assessment
is the framework that most of the promising
entrepreneurs use to finally come up with the
ultimate product or service suited for the a
specific opportunity.
-An opportunity is an entrepreneur’s business
idea that can potentially become a commercial
product or service in the future.
S1: Seeking the Opportunity
-Opportunity seeking is the first and most
difficult process to the number of options that
the entrepreneur will have to choose from. It
Involves the development of new ideas from
various sources.
Macro-Environmental Sources
-Steepled- This is a mnemonic for sociocultural
technological, economic, environmental,
political, legal, ethical, and demographics.
-This represents the general environment where
the entrepreneurs can identify business
opportunities from and where the future business
is about to operate.
INDUSTRY
-This is the source of current trend on what is
happening in the industry where the future
business will belong to.
NEW DISCOVERY OR KNOWLEDGE
-These are new trends that can be the core
business model of a new venture.
FUTURISTIC OPPORTUNITIES
-These are the projected new opportunities that
can possibly affect the new business while it is
running.
MICRO-MARKET SOURCES
-Consumer preferences, interests and
perception
-These are the current needs and wants of the
potential customers that should be discovered
right away by a building entrepreneur.
-A need is recognized when a customer believes
that there is a
difference between his or her current situation
versus his or her desired condition.
-A want is recognized when a customer believes
that there is a specific product or service that can
perfectly suit the need.
COMPETITORS
Recognizing and understanding potential
competitors will aid the entrepreneur to develop
a product or service that is unique and will
surely stand out on the competition.
UNEXPECTED OPPORTUNITIES FROM
CUSTOMERS
-Oftentimes, the most brilliant ventures come
from the most unexpected opportunities.
-Existing problems often give rise an unexpected
opportunity.
IRRITANTS IN THE MARKETPLACE SUCH
AS DETERRENTS, PROBLEMS,
COMPLAINTS, AND DELAYS
• Entrepreneurs see opportunities in situations
where there is a recurring problem or sometimes
when there is no more hope in solving the
problem.
TALENTS, HOBBIES, SKILLS, and
EXPERTISE
- Business opportunities do not just come from
outside forces but also from within the
entrepreneur.
-The entrepreneurs' talent, hobbies, skills, and
expertise can be a good source of opportunity.
LOCATION
• Often, entrepreneurs just have to look at their
ecosystem and they will be able to spot a
business opportunity right away.
Methods In Generating Ideas
Focused Group Discussion(FGD)
-A moderator handles a very open, free-flowing,
and in depth discussion with a group of people
who can provide insightful ideas about a new
product or service that will fill a market need.
Problem-Solving Analysis
- This is similar to the FGD except that the
participants are already given an inventory of
product or service problems. The participants
will just identify from the list given the
compelling problems of a potential
product/service instead of generating new
ideas.
Brainstorming
- Similar to FGD, brainstorming is an activity
that allows the participants to share creative
ideas using the following rules:
-No destructive criticism or judgement allowed
-Wilder ideas are accepted
-More ideas are referred
-Improvement of others’ ideas is allowed
Brainwriting or Internet
-This is exactly the same as brainstorming
except that the channel used is not face-to-face,
but in writing or online.
Macro-Environmental Sources
Steepled Analysis
-The result of the STEEPLED scan will aid the
entrepreneur in deciding what product or
service to set up and whether this new venture
will succeed or not. It can help the
entrepreneur to check if there is a compelling
business opportunity or threat.
Socio-Cultural Factors
-These factors represent a general view of a
locality’s traditions, customs, beliefs, norms
and perceptions. These factors affects how a
person of the locality behaves and reacts to
marketing and selling activities.
-The entrepreneurs should take note of the
following sociocultural factors:
 Health consciousness
 Educational Level
 Attitudes towards imported
goods and services
 Attitudes toward the person’s
lifestyle
 Attitude toward product quality
and customer service
 Attitude toward saving and
investing
  Emphasis on safety
 Buying Habits
 Religion and beliefs
 Technological Factors
- These are composed of innovations
of an existing technology or an
invention. Entrepreneurs should
always be up-to-date with the
technological changes, as these are
catalysts in improving a product or
service or replacing them entirely.
- The entrepreneurs should take note
of the following Technological
Factors:
 Basic infrastructure
 Rate of technological change
 Spending on research and
development
 Technology incentives
 Legislations regarding
technology
 Communication regarding
technology
 Communication infrastructure
 Access to newest technology
 Internet infrastructure and
penetration
 Economic Factors
- These factors play a vital role in
scanning of marketing environment
because economic factors directly affect
any business venture.
- These factors include income, expenses,
and resources, that can influence the
cost of doing and generating income.
- The entrepreneur should take note of the
following Economic Factors:
 Exchange rates
 Unemployment trends
 Labor Cost
 Stages of Business Cycle
 Trade flows and patterns
 Level of consumers’ disposable
income
 Monetary policies
 Price fluctuations
 Stock Market Trends
 Environmental or Ecological Factors
- The scan of these factors will help the
entrepreneur determine if the business
he or she is entering into will comply
with the environmental standards or just
will just be a hazard to people, animals
and nature.
- The entrepreneur should take note of the
following Environmental or ecological
factors:
 Weather
 Climate Change
 Laws regulating environmental pollution
 Air and water pollution
 Recycling
 Waste management
 Attitudes toward “green” or ecological
products
 Endangered Species
 Attitudes toward and support for
renewable energy
 Political Factors
- These factors are mostly induced by the
government policies and
administrations, which can have a strong
effect in the entrepreneur’s business.
- The entrepreneur should take note of the
following:
 Government Stability and likely changes
 Bureaucracy
 Corruption level
 Tax policy
 Freedom of press
 Rule of Law
 Government Effectiveness
 Political Rights
 Legal Factors
- Related with political factors, legal
factors are government laws and
regulations that can restrict or allow
business activities.
- The entrepreneur should take note of the
following Legal Factors:
 Anti-trust law
 Discrimination law
 Copyright, patients/intellectual property
rights
 Consumer protection
 Employment Law
 Health and Safety Law
 Data protection law
 Ethical Factors
- These are the factors that will serve as
an entrepreneurs’ guide on how to be
ethical in running the business.
- The entrepreneur should take note of the
following Ethical Factor:
 Ethical advertising and sales practices
 Accepted accounting, management, and
marketing standards
 Attitude toward counterfeiting and
breaking patents
 Attitude toward development and well-
ding of employees.
 Demographic Factors
- These are the characteristics of the
people in the target market. The
entrepreneur should take note of the
following Demographic Factors:
 Population growth rate
 Age distribution and life expectancy
rates
 Gender distributions
 Social Classes
 Family size and structure
 Minorities
 S2: Screening the Opportunity
- It is the process of cautiously selecting
the best opportunity. The selection will
depend on the entrepreneurs.
 Internal Intent
- i.e, the main objective that the
business will accomplish in the
entrepreneur’s life.
 External Intent
- which will address the compelling
needs of the target.
- The entrepreneur should apply due
diligence and independent
judgement in selecting the
opportunities that have a potential
and eliminate those that are not
within the scope of the
entrepreneur’s risk appetite.
 Risk Appetite
- Refers to the entrepreneurs’
tolerance of business risks.
 Time
- Time must be considered by the
entrepreneur in screening the
opportunities at hand, as it is
considered of the most critical
resources of an entrepreneur. Time
should only be devoted to worthwhile
opportunities.
- Therefore, entrepreneurs must always be
sharp-eyed for real opportunities.
They must be able to intelligently say
no to low compelling opportunities
and proceed with sensible ones.
- The most important elements that are
always present in a opportunity. The
entrepreneur should always say no to an
opportunity if it does not contain any of
these business opportunity elements:
 Has superior value to customers
 Solves a problem, issue, a need or a
want
 Is a potential cash cow
 Matches with the entrepreneur’s skills,
resources, and risk appetite.
 S3: Seizing the Opportunity
- This is the “publishing through” with
the chosen opportunity. Entrepreneurs
should make the best out of this
opportunity, and they should exert effort
and dedication for the future success of
the new venture. Entrepreneurs’ idea
can any be type of innovations.
 Innovation
- is the process of positively improving
an existing product or service. It is a
key driver for economic growth.
Innovation is inevitable as the world
constantly changes. Therefore, the
products and services must also adapt to
these changes.
- Breakthrough Innovation
- These innovations, which may also
include inventions, occur infrequently
as these establish the platform on
which future innovations in an area
are developed. Breakthrough
innovations must be protected by a
patent, a trade secret, or a copyright.
- Technological Innovation
- These innovations are technological
advancements of an existing product
or service. These innovations needs to
be protected.
 Ordinary Innovation
- They are commonly originating from
market analysis and technology pull
instead of a technological push.
- This means that the market has a
strong influence in the implementation
of an innovation.
Product or Service Planning and
Development Process
 In the seeking process, one opportunity
stood out from a number of sources.
The opportunity stood out from a
number of sources. The opportunity was
tested according to its attractiveness and
feasibility in the screening process. The
last process, called product or service
planning and development process.
 Idea Stage
- In this stage, the entrepreneur
determines what is the feasible
products or service that will perfectly
suit the opportunity. Usually, a market
evaluation is conducted by the
entrepreneur to assess whether the new
product or service ideas will be
accepted by the market using values
and benefits to consumer metrics
- On the other hand, the value of the new
products and services should also assess
if these will benefit the entrepreneur.
Product and services that are
unappealing should be eliminated at
this stage.
 Concept Stage
- In this stage the developed idea will
undergo a consumer acceptance test.
This test includes getting the initial
reactions of the primary target
market and the distribution channel.
 Conversational interviews
- Are conducted to understand
consumer preference on physical
characteristics and attributes of a
product or the physical evidence of a
service.
- Both favorable and unfavorable results
will be used to a devise an acceptable
product or service. This will also be
used to compare new idea with the
 competition with regard to
superiority or inferiority.
Product Development Stage
 In this stage, the entrepreneur leverages
on the information generated from
the prospective via concept stage.
Actual reactions from prospective
customers are determined. The
entrepreneur will conduct a consumer
panel where the actual product
samples or actual service samples will
be given or rendered to panel of
potential customers.
 The participants’ task is to critique the
actual product or service and record the
good qualities and inferior attributes.
They are also given samples of
competitors’ products or services for
comparative purposes.
 Test Marketing Stage
- This stage validates the work done from
the first three stages to measure success
in the commercialization of the product
or service. Actual sales results will be
the foundation of the customer’s
acceptance level and will be the basis
in commercializing the product or
service.
 Recognizing the potential market is
really one of the most difficult task to
do. It involves tedious research and
research to ensure success.
 Once the 3s of opportunity spotting and
assessment have been diligently done.
The entrepreneur should now be ready
to prepare a comprehensive business
plan that covers the marketing,
operations, and financial plans.
The Marketing Plan
BUSINESS PLAN
-It is a document wherein there is an integration
of the different functional plans such as
marketing, manufacturing, finance and resource
management, taking into the consideration of the
over-all strategy of the business.
Marketing Process
 Marketing
- is all about knowing the customers
 the marketing process starts with
identifying the customers’ needs where
you are tasked to create a meaningful
value proposition.
 study what the customers want or desire
for you to build a unique selling
proposition.
 Value Proposition
- Simply states WHY a customer should
buy a certain product or service.
Tips for the Entrepreneur on how to
create an Effective Value Proposition
to the Target Customers
 Prepare a situation analysis that details
the problem(s) of the customers.
 Make your value proposition straight to
the point, simple, and specific; in short,
there should be no complications.
 Highlight the value of your product or
service so that customers will easily get
what benefits you can provide.
 Adapt to the language of your market.
 Add credibility-enhancing elements
such as actual testimonials from
customers, partners, and other
stakeholders, putting specific assurance
elements and social acceptability metrics
found in social media or press materials.
 Differentiate your value proposition
with your competitors.
 Unique Selling Proposition
- A unique selling proposition (USP)
refers to how you will sell the product
or service to the customers. It
addresses the customers’ wants and
desires. After you create your value
proposition, you have to figure
 out how to advertise or promote certain
unique features of the product or service
you’re trying to sell.
Tips for the Entrepreneur on how to
create an Effective Unique Selling
Proposition to the Target Customer:
1. Identifying and Rank the Uniqueness
of the Product or Service Attribute
- this is the most difficult part because
you only need to choose one or two at
the most. That attribute will be your key
to success as this will compel customers
to purchase from you and not from your
competitors.
2. Be Very Specific
- Put details that emphasize the
differentiator against the competitors.
This differentiator should be very
compelling and should make customers
think that they are really getting more
value from you than the others.
3. KISS (Keep it short and simple)
- Think of a very catchy unique selling
proposition in the simplest and shortest
way possible.
 Marketing Research
- It is a comprehensive process of
understanding the customers’ intricacies
and the industry they revolved in. It is
also one of the most critical tasks
of an entrepreneur.
 Marketing Size
- is simply the size the arena where the
entrepreneur’s business will play it is the
approximation of the number of buyers
and sellers in a particular market
3 Steps in Determining the Market Size
1. Estimate the Potential Market
- the approximate number of customers
that will but the product or avail the
service. Usually, this is what you call
the market space or the market universe
because this is the total market.
2. Eliminate the Customers
- eliminate the customers who are
probably unlikely to buy the product or
avail the service.
3. Estimate the Market Stage
- It is the plotting and calculation of the
competitors’ market share to determine
the remaining portion for the new
venture. The entrepreneur should first
assess the market situation via surveys,
customer reviews, or any other data-
gathering methods.
Customer Requirements
 Market Intelligence
- Includes the customer profiling drives
the entrepreneur on what correct
strategies and tactics.
 Market Segmentation
- It is the process of grouping similar or
homogenous customers according to the
demographic, psychographic,
geographic (location), and behaviors.
The Marketing Mix: 7P’S of Marketing
Marketing Mix
- The marketing mix is a widely accepted
strategic marketing tool that combines
that combines the original
4Ps (product, place, price, promotion)
with the additional 3Ps-people,
packaging, and process-in formulating
marketing tactics for a product or
service.
 Product
- A product is any physical good, service,
or idea that is created by an entrepreneur
or an innovator in serving the needs of
the customer and addressing their
existing problems.

 Place
- Refers to a location or the medium of
transaction. A strategic location depends
on the nature of the business and the
primary target market
 Price
- The peso value that the entrepreneur
assigns to a certain product or service
after considering its costs, competition,
objectives, positioning, and target
market. It is the only P in the 7Ps
that generates revenue for the
business.
 4/7 Promotion
- It involves presenting the products or
services to the public and how these can
address the public’s needs, wants,
problems, or desires.
- the primary target market should be
identified because it will become the
main audience.
- The main goal of promotion is to gain
attention.
 5/7 People
- In today’s marketing arena, people play
a vital role in servicing customers even
though the entrepreneur sells only
physical goods.
 6/7 Packaging
 How the product or service is presented
to customers.
 overall identification (look and feel) of
the product or service.
 the uniqueness of the product from
competitors
 the first element that customers see
because they don’t know what’s inside
yet
 7/7 Process
 It is defined as a step-by-step procedure
or activity workflow that the
entrepreneur or employees follow to
effectively and efficiently service
customers.
 Its components include input,
throughput, and output.
Most Common Pricing Strategies
Bundling
This refers to two or more products or services
in one reduced price
Penetration Pricing
- This refers to setting low prices to
increase market share, but the
entrepreneur will eventually increase the
price once the desired market share is
achieved.
Skimming
- This is the opposite of penetration
pricing where prices are initially high
and then they are lowered to offer the
product or service to a wider market.
Competitive Pricing
- This refers to a benchmarking prices
with the competitors.
Product Line Pricing
- This refers to pricing different products
or services within a parallel product
array using varying price points.
Psychological Pricing
This considers the psychology and positioning
of price in the market
Premium Pricing
This refers to setting a very high price to reflect
elitism and superiority
Optional Pricing
This refers to adding an extra product or service
on top of the original to generate more revenue.
Cost-Based Pricing
The basis of markup is the cost of sales.
Cost Plus Pricing
The markup is based on a certain percentage of
cost
Fundamentals of Brand Management
 Brand
- Refers to the identity of a company, of a
product, of a service, or of an
entrepreneur himself or herself.
- It is a symbol of promise or
assurance from the
entrepreneur that what it
purports to the customer will
happen.
 Branding
- the process of integrating the
strategies formed from the marketing
mix to give an identity to the product or
service.
Goals of Branding
1. Establishing the target customers
that the business is reliable and
trustworthy, and that the product or
service is the superior solution to
their current problem;
2. Differentiating the competitors
3. Driving customer loyalty and
retention
 Product Development
- It is the process of developing, testing,
and commercializing a product or
service with the ultimate objective of
solving the problem of the primary
target market.
Four Sequential Steps of Product
Development
 Sequential Steps of Product
Development
 Developing a product or service
description.
 Creating a prototype
 Testing the prototype
 Validating the market
 Product or Service Description
- Describes how a product or service
works and how it benefits the customers
- Serve as the blueprint of all business
operations
 Product or Service Description
- It should directly address the primary
target market in a personal manner using
everyday language.
- It should highlight the features that will
cater to the customer’s needs or address
the customer’s problems.
- Realistic superlatives should be used for
the product description
Advantages of Creating a Prototype
 Creating a prototype enables the
entrepreneur to engage in trial-and-error,
provides room for improvements, and
refines the functionality of the product
design or service process.
 Creating a prototype provides the
entrepreneur a window to test the
performance and specifications of
various materials and service processes.
 A prototype helps the entrepreneur
effectively describe the product or
service to the product team.
 Creating a prototype elicits respect from
key stakeholders and customers. At the
same time. A prototype gives credibility
to the entrepreneur
 Creating a Prototype of the Product
or Service
 Prototype
- is a preliminary model or sample of a
new product or service that is created to
test a product concept or service
process.
 Prototyping
- A duplication of a product as it will be
produced, which may contain such
details as color, graphics, packaging and
directions.
- One of the important early steps in the
inventing process is making a prototype.
Benefits are the reasons why customers
will decide to buy the products such as
affordability, efficiency or ease of use.
- The features of the product or service
merely provide a descriptive fact about
the product or service.
4M’S of Operations
 Operations Plan
- Operating the business
- Operations management, controls the
implementation of the business plan
Manufacturing of Goods
 Method
- the processes to be followed in
effectively manufacturing or delivering
a product or service;
- It describes how an entrepreneur will
run the business from the facets of the
business such as the manufacturing of
goods, service delivery process,
distribution of goods and services,
logistics for delivery of goods, and
inventory management.
 Material
- Raw materials necessary in the
production of a product. Materials
mainly form part of the finished product.
Just in case the resources are below
standard, the finished product will be of
unsatisfactory as well.
- Entrepreneur may consider cost, quality,
availability, credibility of suppliers and
waste that the raw material may
produce.
 Manufacturing
- is the process of translating raw
materials into finished goods that are
acceptable to the customer’s standards
 Machine
- Discusses about manufacturing
equipment used in the production of
goods or delivery of services.
- In selecting the type of equipment to
purchase, the entrepreneur may consider
types of products to be produced,
production system to be adopted, cost of
the equipment, capacity of the
equipment, availability of spare parts in
the local market, efficiency of the
equipment and the skills required in
running the equipment.
 Manpower
- the right human resources who will
handle certain business operations.
 Job Description
- Enumerates the duties and
responsibilities of the potential
employee, including the scope,
limitations, and terms and conditions of
employment.
 Job Title
- which is the summary of the employee
will do. The entrepreneur should devise
a respectable and decent job title
because the title boosts the self-
confidence of the employee.
 Employment Qualification
 - Used in creating a product or performing
1. Educational Background a service, which includes supply chain
- this gives the entrepreneur an idea on Management.
the degree of the candidate’s knowledge
of basic things.

2. Work Experience
- this will tell him or her what to expect
from the applicant or what he or she can
potentially contribute to the business
based on his on her past positions and
experiences.

3. Specific skill or knowledge

- this one is important especially on
technical jobs that require high
proficiency.

4. Work Attitude
- This deals with the worker’s integrity
and how he or she deals with his or her
co-workers, bosses, and customers.

5. Job Contract
- Summarizes the terms and conditions of
the candidate’s employment with the
Business

 Employee Development

1. Training People
- is one of the biggest investment of an
entrepreneur or a businessman.

2. Employment Orientation
- usually one-to two-day session that
summarizes the history of the business,
its vision and mission, policies and
procedures, culture, and norms of the
business.

3. Machines
- The “best friend” of manpower in
producing goods and offering
services. They go hand in hand.

4. Materials